ROI Calculator
Quantify your performance. Calculate absolute returns and annualized velocity with professional-grade financial auditing.
Annualized ROI (CAGR) provides a normalized metric that accounts for the holding duration, allowing you to compare assets with different time horizons.
Input capital metrics to generate
Investment performance audit engine ready
ROI Calculator Guide: Mastery of Investment Returns
"Investment is not about predicting the future, but about quantifying the efficiency of your capital deployment."
Audited Precision
Our CAGR (Compound Annual Growth Rate) algorithms ensure normalized performance auditing across any time horizon. Learn more with our Compound Interest Calculator.
Capital Efficiency
Analyze the absolute return versus your initial deployment to identify the high-velocity segments of your portfolio.
Real-Time Synthesis
Instant recursive calculations provide immediate feedback on how shifts in final valuation impact your annualized yield.
ROI vs. Annualized ROI (CAGR)
Simple ROI measures the total growth of an investment from start to finish. However, a 50% ROI over 1 year is vastly superior to a 50% ROI over 10 years.
Annualized ROI (CAGR) solves this by providing the geometric average of what your return would have been each year to reach the final result. It allows you to compare apples to apples when investments have different durations.
Investor Protocol: The Holding Period
Short-term fluctuations (under 12 months) often produce extreme annualized ROIs. For professional audits, it is recommended to focus on multi-year time horizons to smooth out market volatility.
Metric Comparison: ROI vs. ROE vs. ROA
Understanding which metric to use depends on what you are analyzing (a project, a company, or equity).
| Metric | Full Name | Best Used For | Formula |
|---|---|---|---|
| ROI | Return on Investment | Individual investments, marketing campaigns, simple projects. | (Net Profit / Cost) × 100 |
| ROE | Return on Equity | Shareholders analyzing a company's profitability relative to their stake. | Net Income / Shareholder's Equity |
| ROA | Return on Assets | Management efficiency; how well a company uses its assets vs debt. | Net Income / Total Assets |
Frequently Asked Questions
Q: What is a good ROI?
Context matters. While 7-10% is the S&P 500 average (historically), riskier assets like Venture Capital or Crypto often target 20-30%+. Real Estate often targets 8-12% cash-on-cash.
Q: Does this include taxes?
No. This tool calculates pre-tax (Gross) ROI. Your Net ROI depends heavily on your specific capital gains tax bracket and jurisdiction.
Q: How is CAGR calculated?
We use the standard wall-street formula: CAGR = (Ending Value / Beginning Value)^(1 / Number of Years) - 1. This smoothes out volatility.
Q: What is negative ROI?
A negative ROI means you lost money. An ROI of -50% means you lost have your initial capital. An ROI of -100% means a total loss.